DAMAGE CAUSED by the recent string of typhoons and massive floods is estimated to shave 0.15 percentage point off the already grim gross domestic product (GDP) outlook for the year, preliminary estimates by the National Economic and Development Authority (NEDA) showed.
NEDA Undersecretary Rosemarie G. Edillon estimated the five typhoons that struck the country this quarter — Pepito, Quinta, Rolly, Siony and Ulysses — may have caused P90 billion in output losses so far, or equivalent to a reduction to the full-year GDP by 0.15 percentage point.
The economic team is currently reviewing its forecast of a 4.5-6.6% drop in GDP this year, after the economy contracted by 10% in the first nine months.
In an online briefing, Ms. Edillon said initial estimates showed the damage caused by Typhoon Ulysses, which caused heavy flooding in parts of Cagayan Valley and Metro Manila last week, were still lower compared with that of Typhoon Ondoy in 2009.
However, the government vowed to remain fiscally prudent in its crisis response as it tries to revive an economy battered by the coronavirus pandemic.
“We still want to maintain fiscal prudence because as you know, if you stock up on borrowing, then it will be the next generation who will be paying for it, so we are being very prudent and very strategic about all this. It’s really about making sure that we may use up all the tools that are available there so it doesn’t have to be all the fiscal measures,” Ms. Edillon said.
Finance Secretary Carlos G. Dominguez III said the government’s fiscal response remains on track.
“What we are really facing is a problem of people’s confidence in the system, no matter what fiscal response you have, if you don’t have confidence, no one is going to spend. So essentially, we are looking at increasing people’s confidence in not getting sick and making sure that they understand that the health infrastructure of the government can support whoever gets sick,” he said in a separate online briefing.
On Tuesday, Mr. Dominguez told Bloomberg TV that he sees no need to further increase government borrowings.
The Philippine government’s fiscal stimulus is estimated at P595.6 billion, or 3.1% of the GDP, according to the International Monetary Fund’s (IMF) database.
A second stimulus package worth P140 billion have been allotted under Republic Act No. 11494 or the Bayanihan to Recover as One Act (Bayanihan II) but as of Monday, only 63% or P87.9 billion have been released so far.
The government is expecting that relaxed quarantine restrictions will lift consumer and business confidence and spur increased economic activity during the fourth quarter.
Household spending continued to decline by 9.3% in the third quarter but at a slower pace compared with the 15.3% decline in the previous three months.
Ms. Edillon said consumption will remain dampened in the fourth quarter from its year-ago level as restrictions and health safety protocols remain but some improvement can be expected on a quarter-on-quarter basis due to the Christmas season. — B.M.Laforga